HK Stock Market Move | Cement stocks have risen at the forefront, and policy efforts are expected to drive an increase in infrastructure investment. The industry's outdated production capacity may accelerate its phase-out.

In the stock market, cement stocks have seen the highest gains. As of the time of writing, CNBM (03323) is up 6.77% at HK$4.26; CR BLDG MAT TEC (01313) is up 4.58% at HK$1.6; Anhui Conch Cement (00914) is up 3.98% at HK$22.2; and WESTCHINACEMENT (02233) is up 2.96% at HK$1.74. Galaxy Securities points out that the demand for cement has been steadily recovering recently, and prices are expected to continue to rise. Looking ahead, with the short-term demand for cement set to continue recovering and with the peak production and low clinker inventory background, cement prices are expected to continue to rise. In the medium to long term, the push from policy for infrastructure investment in 2025 is expected to boost demand in the cement market. Additionally, as cement is included in the national carbon market, the clearance of backward production capacity in the industry will accelerate, leading to an increase in industry concentration, benefiting leading cement companies. Attention should be paid to the recovery of demand and the implementation of price increases. Guotai Junan points out that the policy restrictions on cement supply side capacity have officially entered the implementation phase recently. As the staggered price increase trend gains momentum and demand fluctuations are expected to narrow, the sector's profitability in terms of ton profit levels is expected to see substantial improvement in the fourth quarter compared to the previous quarter and the same period in 2025. The expectation of optimization in the supply side is enhanced. The new market value management policy imposes stricter requirements on heavyweight and sub-net sectors, with the highest relevance to cement leaders.